Electricity Market Regulations, 2011

L.N. 166 of 2011

MALTA RESOURCES AUTHORITY ACT

(CAP. 423)

Electricity Market Regulations, 2011

IN exercise of the powers conferred by sub-article (1) of

article 28 of the Malta Resources Authority Act, the Minister for

Resources and Rural Affairs, after consultation with the Malta

Resources Authority, has made the following regulations:-

(1) The title of these regulations is the Electricity

Market Regulations, 2011.

(2) These regulations transpose Directive 2009/72/EC

concerning common rules for the internal market in electricity and

repealing Directive 2003/54/EC concerning common rules for the

internal market in electricity, Directive 2005/89/EC concerning

measures to safeguard security of electricity supply and infrastructure

investment and Article 16 of Directive 2009/28/EC on the promotion

of the use of energy from renewable sources. These regulations

establish common rules for the generation, distribution and supply

of electricity, together with consumer protection provisions, with a

view to improving and integrating competitive electricity markets in

the Community. These regulations also lay down

(a) the rules relating to the organisation and functioning

of the electricity sector,

(b) open access to the market where applicable, the

criteria and procedures applicable to calls for tenders and the

granting of authorisations and the operation of systems;

(c) universal service obligations and the rights of

electricity consumers and clarification of competition

requirements.

(4) These regulations also establish measures for the

safeguarding of security of electricity supply so as to ensure the

proper functioning of the market for electricity and to ensure an

adequate level of generation capacity, an adequate balance between

supply and demand, and an appropriate level of interconnection.

Regulation 4, 11

EXEMPTIONS FROM THE REQUIREMENT OF AN AUTHORISATION

OR LICENCE

1. A producer who -

(a) produces electricity solely for his own use;

(b) is not connected in parallel to the distribution system; and

(c) has installed a total peak generation capacity of less than 1500

kVA.

2. A producer with a total peak generation capacity rated up to and including

16 Amps per phase, single-phase or multi-phase, 230/400V AC produced solely

from renewable sources of energy or cogeneration plant, shall be exempted from

the requirement of an authorisation to construct the generation station and from the

requirement to hold a licence but shall still be required to notify the Authority, in such

form and manner as required by the Authority prior to construction of such generation

plant, and submit to the Authority such information as the Authority may request

from time to time.

In these regulations, unless the context otherwise

requires:-

“the Act” means the Malta Resources Authority Act;

“ancillary service” means a service necessary for the

operation of a distribution system;

“the Authority” means the Malta Resources Authority

established by article 3 of the Act;

“balance between supply and demand” means the

satisfaction of foreseeable demands of consumers to use

electricity without the need to enforce measures to reduce

consumption”;

“the Commission” means the European Commission as

established by the Treaty on the European Union as amended

by subsequent Treaties;

“the Community” means the European Community as

established by the Treaty on the European Union as amended

by subsequent Treaties;

“control” means rights, contracts or any other means

which, either separately or in combination and having regard

to the considerations of fact or law involved, confer the

possibility of exercising decisive influence on an undertaking,

in particular by

(a) ownership or the right to use all or part of the

assets of an undertaking;

(b) rights or contracts which confer decisive

influence on the composition, voting or decisions of the

organs of an undertaking;

“customer” means either a person who purchases

electricity in bulk for resale purposes or a final customer of

electricity;

“direct line” means either an electricity line linking

an isolated generation site with an isolated customer or

an electricity line linking an electricity producer and an

electricity supply undertaking to supply directly their own

premises, subsidiaries and eligible clients;

“Directive 68/151/EEC” means the European Economic

Community Directive 68/151/EEC of 9 March 1968 on the

coordination of safeguards which, for the protection of the

interests of members and others, are required by Member

States of companies within the meaning of the second

paragraph of article 58 of the Treaty, with a view to making

such safeguards equivalent throughout the Community, as

amended by subsequent legislation;

“distribution” means the transport of electricity on

high-voltage, medium-voltage and low-voltage distribution

systems with a view to its delivery to customers, but does not

include supply;

“distributed generation” means generation plants

connected to the distribution system;

“distribution system operator” means a person

responsible for operating, ensuring the maintenance of and, if

necessary, developing the distribution system in a given area

and, where applicable, its interconnections with other systems

and for ensuring the long-term ability of the system to meet

reasonable demands for the distribution of electricity;

“economic precedence” means the ranking of sources of

electricity supply in accordance with economic criteria;

“electricity derivative” means a financial instrument

specified in points 5, 6 or 7 of Section C of Annex I to

Directive2004/39/EC of the European Parliament and of the

Council of 21 April 2004 on markets in financial instruments

(where that instrument relates to electricity);

“electricity producer” means a person generating

electricity;

“electricity supplier” means the person who sells

electricity by retail to customers;

“electricity supply contract” means a contract for

the supply of electricity, but does not include an electricity

derivative;

“electricity undertaking” means any person carrying

out at least one of the following functions: generation,

distribution, supply, or purchase of electricity, which is

responsible for the commercial, technical or maintenance

tasks related to those functions, but does not include final

customers;

“energy consumer checklist” means the checklist of

practical information relating to energy consumer rights

established by the Authority;

“energy efficiency or demand-side management”

means a global or integrated approach aimed at influencing

the amount and timing of electricity consumption in order to

reduce primary energy consumption and peak loads by giving

precedence to investments in energy efficiency measures, or

other measures, such as interruptible supply contracts, over

investments to increase generation capacity, if the former

are the most effective and economical option, taking into

account the positive environmental impact of reduced energy

consumption and the security of supply and distribution cost

aspects related to it;

“final customer” means a person purchasing electricity

for his own use or consumption and not for wholesale or retail

purposes;

“generation” means the production of electricity;

“horizontally integrated undertaking” means an

undertaking performing at least one of the functions of

generation for sale, distribution, or supply of electricity, and

another non-electricity activity;

“household customer” means a person purchasing

electricity for his own household consumption, excluding

commercial or professional activities;

“integrated electricity undertaking” means a vertically or

horizontally integrated undertaking;

“interconnector” means equipment used to link

electricity systems;

“long-term planning” means the planning of the need for

investment in generation and distribution capacity on a long-

term basis, with a view to meeting the demand of the system

for electricity and securing supplies to customers;

“Member State” means a member state of the European

Union;

“the Minister” means the Minister responsible for

resources;

“non-household customer” means a person purchasing

electricity which is not for its own household use and includes

producers and wholesale customers;

“operational network security” means the continuous

operation of the distribution network under foreseeable

circumstances;

“person” means any natural or legal person;

“Regulation (EC) No 714/2009” means Regulation (EC)

No 714/2009 of the European Parliament and of the Council

of 13 July 2009 on conditions for access to the network for

cross-border exchanges in electricity and repealing Regulation

(EC) No 1228/2003;

“related undertaking” means affiliated undertakings,

within the meaning of Article 41 of the Seventh Council

Directive 83/349/EEC of 13 June 1983 based on Article 44(2)

(g) and or associated undertakings, within the meaning of

Article 33(1) of that Directive, and, or undertakings which

belong to the same shareholders;

“renewable energy sources” means renewable non-

fossil energy sources (wind, solar, geothermal, wave, tidal,

hydropower, biomass, landfill gas, sewage treatment plant gas

and biogases);

“security” means both security of supply and provision

of electricity, and technical safety;

“security of electricity supply” means the ability of an

electricity system to supply final customers with electricity;

“small enterprises” means enterprises with fewer than

50 occupied persons and an annual turnover or balance sheet

not exceeding 10 million euro;

“small isolated system” means any system with

consumption of less than 3,000 GWh in the year 1996, where

less than 5 % of annual consumption is obtained through

interconnection with other systems;

“supply” means the sale or retail, including resale, of

electricity to customers;

“system user” means a person supplying to, or being

supplied by a distribution system;

“tendering procedure” means the procedure through

which planned additional requirements and replacement

capacity are covered by supplies from new or existing

generating capacity;

“universal service” means the right to be supplied

with electricity of a specified quality at reasonable, easily

and clearly comparable, transparent and non-discriminatory

prices;

“universal service obligation” means an obligation

imposed on a supplier to ensure that all household

customers, and, where the Minister deems it appropriate,

small enterprises, enjoy universal service, that is the right

to be supplied with electricity of a specified quality within

their territory at reasonable, easily and clearly comparable

and transparent prices;

“vertically integrated undertaking” means an

electricity undertaking or a group of electricity undertakings

where the same person or the same persons are entitled,

directly or indirectly, to exercise control, and where the

undertaking or group of undertakings perform at least one of

the functions of distribution, and at least one of the functions

of generation or supply of electricity;

“wholesale customer” means a person purchasing

electricity in bulk for the purpose of resale inside or outside

the system where such person is established, not being for

his own use or consumption.

MEASURES ON CLIENT PROTECTION

1. Without prejudice to Community rules on consumer protection, in

particular Directive 97/7/EC of the European Parliament and of the Council of 20

May 1997 on the protection of consumers in respect of distance contracts and Council

Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, the

measures referred to in regulation 8 are to ensure that customers

(a) have a right to a contract with their electricity service provider

that specifies

(i)

the identity and address of the supplier;

(ii)

the services provided, the service quality levels offered,

as well as the time for the initial connection;

(iii)

the types of maintenance service offered

(iv)

the means by which up-to-date information on all

applicable tariffs and maintenance charges may be obtained;

(v)

the duration of the contract, the conditions for renewal

and termination of services and of the contract and whether withdrawal

from the contract without charge is permitted;

(vi)

any compensation and the refund arrangements which

apply if contracted service quality levels are not met, including

inaccurate and delayed billing;

(vii) the method of initiating procedures for settlement of

disputes in accordance with paragraph (e) of item 1 of this Schedule;

(viii) information relating to consumer rights, including

on the complaint handling and all of the information referred to in

this point, clearly communicated through billing or the electricity

undertaking’s web site.

Conditions shall be fair and well-known in advance. In any case,

this information should be provided prior to the conclusion or confirmation

of the contract. Where contracts are concluded through intermediaries, the

information relating to the matters set out in this item shall also be provided

prior to the conclusion of the contract;

(b)

are given adequate notice of any intention to modify contractual

conditions and are informed about their right of withdrawal when the notice is

given. Service providers shall notify their subscribers directly of any increase

in charges, at an appropriate time no later than one normal billing period after

the increase comes into effect in a transparent and comprehensible manner.

Customers are free to withdraw from contracts if they do not accept the new

conditions notified to them by their electricity service provider;

(c)

receive transparent information on applicable prices and

tariffs and on standard terms and conditions, in respect of access to and use of

electricity services;

(d)

are offered a wide choice of payment methods, which do not

unduly discriminate between customers. Prepayment systems shall be fair and

adequately reflect likely consumption. Any difference in terms and conditions

shall reflect the costs to the supplier of the different payment systems. General

terms and conditions shall be fair and transparent. They shall be given in

clear and comprehensible language and shall not include non-contractual

barriers to the exercise of customers’ rights, for example excessive contractual

documentation. Customers shall be protected against unfair or misleading

selling methods;

(e)

benefit from transparent, simple and inexpensive procedures

for dealing with their complaints. In particular, all consumers shall have the

right to a good standard of service and complaint handling by their electricity

service provider. Such out-of-court dispute settlements procedures shall enable

disputes to be settled fairly and promptly, preferably within three months,

with provision, where warranted, for a system of reimbursement and, or

compensation. They should, wherever possible, be in line with the principles

set out in Commission Recommendation 98/257/EC of 30 March 1998 on the

principles applicable to the bodies responsible for out-of-court settlement of

consumer disputes;

(f)

when having access to universal service under the provisions

pursuant to sub-regulation (3) of regulation 8 of these regulations, are informed

about their rights regarding universal service;

(g)

have at their disposal their consumption data, and shall be able

to, by explicit agreement and free of charge The Authority shall define a

format for the data and a procedure for consumers to have access to the data.

No additional costs shall be charged to the consumer for that service;

(h)

are properly informed of actual electricity consumption and

costs frequently enough to enable them to regulate their own electricity

consumption. That information shall be given by using a sufficient time frame,

which takes account of the capability of customer’s metering equipment and

the electricity product in question. Due account shall be taken of the cost-

efficiency of such measures. No additional costs shall be charged to the

consumer for that service.

2. Enemalta shall ensure the implementation of an intelligenta metering

system that shall assist the active participation of consumers in the electricity supply

market. The implementation of those metering systems may be subject to an economic

assessment of all the long-term costs and benefits to the market and the individual

consumer or which form of intelligent metering is economically reasonable and cost-

effective and which timeframe is feasible for their distribution.

Enemalta shall ensure the interoperability of that metering systems and

shall have due regard to the use of appropriate standards and best practice and the

importance of the development of the internal market in electricity.

Any person who prior to the entry into force of these

regulations was licensed under, and any licence issued under

the Electricity Regulations, 2004 shall be deemed to have been

licensed or to have been issued under these regulations, and the

provisions of these regulations shall mutatis mutandis apply to

that person and licence

Provided that such person may continue to perform

such operations or activities as licensed under existing licence

conditions, unless required by the Authority to apply for a new

licence under these regulations

Provided further that any such person shall comply with

such licence conditions as established in the new licence that

may be issued by the Authority with effect from such date that

the Authority may establish.

Regulations 11 (2)

CRITERIA FOR THE AWARD OF AUTHORISATIONS

An application for an authorisation may be determined by the Authority in

accordance with the following criteria

(i) the protection of public health and safety;

(ii) the protection of the environment;

(iii) land use and siting;

(iv) the use of public ground;

(v) energy efficiency;

(vi) the nature of the primary sources;

(vii) the characteristics particular to the applicant, such as technical,

economic and financial capabilities;

(viii) compliance with measures adopted pursuant to regulation 8 of

these regulations;

(ix) the contribution of the generating capacity to the increase to the

share of energy from renewable sources in gross final consumption of energy;

(x) the contribution of generating capacity to reducing emissions.

€3.24

(1) The following operations and activities shall

require a licence issued by the Authority and in accordance

with such terms and conditions as may be specified in the

licence:-

(a) generation of electricity;

(b) supply of electricity;

(c) carrying out of any of the functions of a

distribution system operator.

(2) A licence shall not be required for the

categories specified in the First Schedule to these regulations

for the carrying out of the operations or activities mentioned

therein.

(3) Without prejudice to any other law, licences

may be granted or refused on the basis of the following

criteria

(a) compliance by the applicant with all other

relevant permits and authorisations, however so

described, including those issued by any other public

authority or Government Department;

(b) the capability of the applicant to ensure safety

conditions, in the context of the licence being applied for;

(c) private and professional integrity of the applicant;

(d) protection of the health and safety of employees;

(e) protection of the environment;

(f) record of compliance with these regulations and

any other relevant laws by the person or entity with regard to

whom the decision shall be made;

(g) compliance with safety, health, security, hazardous

substances, environment, land use and planning requirements.

(4) An application for a new licence or for its

renewal under these regulations shall be

(a) in writing and in such form and shall contain such

information as the Authority may require;

(b) accompanied by such fees, bank guarantees and

insurance policies as the Authority may determine and deem

to be appropriate. All fees shall be payable on application

and any bank guarantees and, or insurance policies shall be

effective as from the date of the issue of the licence and shall

subsist throughout its duration. Interests and penalties, as

established by the Authority, shall be payable in the event of

default in the due payment of fees

Provided that a licence granted under these regulations

shall not relieve the licensee from the requirement of any

other licence, permit or other authorisation, or from an

obligation arising from any other law.

(5) A licence granted under these regulations may

include such conditions as appear to the Authority to be requisite

or expedient, having regard to the duties of the Authority.

(6) The Authority shall communicate to the applicant

in writing within a reasonable time, which shall not be of more

than six months from the date of receipt of a valid application,

any decision taken concerning an application for a licence or

an application for the renewal of a licence or any valid reason

impeding the Authority to reach such a decision.

The Authority may, at any time in the course of the

period for which a licence is valid, order its suspension, revocation

or cancellation where the Authority is satisfied that

(a) the holder of the licence has failed or is failing

to comply with any condition of the licence or with these

regulations; or

(b) the licensee does not possess all other relevant

licences, permits and authorisations however so described

that are required by any other public authority or Government

department; or

(c) the holder of the licence is contravening any

requirement imposed by law; or

(d) the holder of the licence fails to comply with any

directive given by the Authority; or

(e) any information submitted in the application for

a licence or the application for renewal of a licence and for

which the licence has been issued or renewed, as the case

may be, is determined to be false; or

(f) if the holder of the licence does not meet any criteria

in respect to one or more of the criteria referred to in sub-

regulation (3) of regulation 4 of these regulations

Provided that in exercising the powers for suspension,

revocation or cancellation of licences the Authority may

take into account the nature of the failure, or the fact that the

holder of the licence is taking the appropriate steps which the

Authority considers to be necessary in order to comply with

the conditions of the licence, these regulations or any other

requirement that the Authority may deem relevant.

(1) When the holder of a licence issued under these

regulations, decides either to suspend or terminate his licence, such

holder shall promptly notify the Authority in the form prescribed by

the Authority, to notify such a termination or suspension.

(2) Upon acknowledgment by the Authority

to the holder of a licence of the notification mentioned in sub-

regulation (1) hereof, the licence shall be considered to have ceased

to be in force and with immediate effect from the date of such

acknowledgment such holder shall be deemed to be unlicensed.

(3) Notwithstanding any notice for the termination or

suspension of a licence, the holder of the licence shall remain liable

for the payment of any fee due to the Authority.

(1) A licence issued by the Authority under these

regulations shall not be validly transferred inter vivos to any other

person unless

(a) the transferor informs in writing the Authority in

such form and manner as the Authority shall prescribe;

(b) the Authority is satisfied that at least the same

criteria as listed in sub-regulation (3) of regulation 4 of these

regulations are complied with;

(c) the transfer is subject to the conditions prescribed

in the licence; and

(d) the Authority approves in writing the transfer of

the licence.

(2) A licence issued by the Authority under these

regulations shall not be validly transmitted causa mortis to any

other person unless

(a) the transferor informs in writing the Authority in

such form and manner as the Authority shall prescribe;

(b) the Authority is satisfied that at least the same

criteria as listed in sub-regulation (3) of regulation 4 of these

regulations are complied with;

(c) the transfer is subject to the conditions prescribed in

the licence; and

(d) the Authority approves in writing the transfer of the

licence

Provided that a licence issued in terms of these

regulations shall be an indivisible right

Provided further that in the event that the Authority

approves the transfer of the licence as aforesaid, the transfer

shall have retrospective effect from the date of the death of

the decujus.

(2)

Where the licensee is a body corporate or any

other body of persons, a change in the control of the ownership

or management of that body shall be deemed to be equivalent to

the transfer of the licence, and shall be subject to the approval of

the Authority. For the purpose of this sub-regulation, a transfer in

the control of the ownership of a body corporate or other body of

persons shall be deemed to occur in any case where a transfer of the

capital, shares, stocks or other rights held in the body corporate or

other body of persons leads to a change in the person holding the

controlling interest therein.

(1) Enemalta shall provide to all household customers

universal service, and, where the Minister deems it appropriate, it

shall also provide such universal service to small enterprises.

(2) The distribution system operator shall connect

customers to its network under terms, conditions and tariffs set in

accordance with the procedure laid down in sub-regulation (6) of

regulation 21 of these regulations.

(2) Final customers shall be provided by their

electricity supplier with all relevant consumption data. The supplier

of electricity shall give such data to final customers in a non-

discriminatory manner as regards cost, effort or time.

(3) The Authority shall monitor, report to, and propose

measures to the Minister every two years whether

(a) there are adequate safeguards to protect

vulnerable customers, including measures to help them avoid

disconnection and to protect final customers in remote areas;

and

(b) there are high levels of consumer protection,

particularly with respect to transparency regarding contractual

terms and conditions, general information and dispute

settlement mechanisms.

(4) Household customers shall have the right to the

measures set out in the Second Schedule to these regulations.

(5) The electricity supplier shall specify in or with

the bills and in promotional materials made available to final

customers

(a) the contribution of each energy source to the

overall fuel mix of the supplier over the preceding year in a

comprehensible and, at a national level, clearly comparable

manner;

(b) at least the reference to existing reference sources,

such as web pages, where information on the environmental

impact, in terms of at least CO 2 emissions and the radioactive

waste rresulting from the electricity produced by the overall

fuel mix of the supplier over the preceding year is publicly

available;

(c) information concerning their rights as regards the

means of dispute settlement available to them in the event of

a dispute

Provided that, with regard to paragraphs (a) and (b) of

this sub-regulation with respect to electricity obtained via an

electricity exchange or imported from an undertaking situated

outside the Community, aggregate figures provided by the

exchange or the undertaking in question over the preceding

year may be used.

Provided further that the electricity supplier may

be audited by the Authority to ensure that the information

provided to its customers pursuant to this regulation is

reliable.

(6) The electricity supplier shall in cooperation with

the Authority, take the necessary steps to provide customers with

a copy of the energy consumer checklist and ensure that it is made

publicly available.

(1) At least every two years from the entry into force

of these regulations or at such other date as may be required by

the Authority, the distribution system operator shall draw up and

submit to the Authority an estimate of the available generating

and distribution capacity, the interconnectors with other systems,

the actual distribution capacity, all ancillary services, operational

network security and the current demand for electricity as well

as the generating and distribution capacity which is likely to be

connected to the system, of the need for interconnectors with other

systems, of potential distribution capacity, of all ancillary services,

the projected balance of supply and demand for the next five year

period, and the prospects for security of electricity supply covering

the period between five and fifteen years from the date of the

report.

(2) The Authority shall monitor the estimates produced

as per sub-regulation (1) of this regulation and publish a report

every two years by the 31 st July at the latest. The report shall

be drawn in cooperation with the distribution sys tem operator

and shall cover, in particular, operational network security, the

projected balance of supply and demand on the market for the

next five years, the level of expected future demand and envisaged

additional capacity being planned or under construction and

the quality and level of maintenance of the networks, as well as

measures to cover peak demand and to address any envisaged

shortfalls on the market, the prospects for security of electricity

supply for the period between five and fifteen years from the

date of the report, investment intentions for the next five or more

calendar years of the distribution system operator including any

known plans for interconnection investment. The part of the report

on interconnection investment, if appropriate, shall take account

of

(a) the principles of congestion management, as set

out in Regulation (EC) No 228/2003;

(b)

planned transmission lines;

(c) expected patterns of generation, supply, cross-

border exchanges and consumption, allowing for demand

management measures;

(d) regional, national and European sustainable

development objectives, including those projects forming part

of the Axes for priority projects set out in Annex I to Decision

No 1229/2003/EC.

Within such time and following such consultation as

the Authority may direct, the distribution system operator shall

prepare, keep updated and publish a “network code”, subject to

the approval of the Authority, defining the technical safety criteria

and the technical rules establishing the minimum technical design

and operational requirements for the connection to the system of

generating installations, distribution systems, directly connected

consumers’ equipment, interconnector circuits and direct lines

and set the minimum operational rules and obligations on network

security and foreseeable circumstances in which security shall be

maintained. The “network code” shall ensure the interoperability

of systems and shall be objective and non-discriminatory. The

network code shall be notified in accordance with the Notification

Procedure Regulations. The Authority may from time to time

give directions, which may include technical safety criteria, to the

distribution system operator in respect to the matters to be specified

in the network code and its review and revision by the distribution

system operator.

(1) The construction of new generation capacity shall

require an authorisation from the Authority. The authorisation

procedure for the construction of new generating capacity, shall

be conducted in accordance with objective, transparent and non-

discriminatory criteria

Provided that no such authorisation shall be required for

the producers listed in the First Schedule to these regulations.

(2) Authorisations shall be granted or refused on

the basis of the criteria listed in the Third Schedule to these

regulations.

(3) The Authority, in the processing of applications for

authorisations, shall take into account the size and potential impact

of the generation plant which the application relates to.

(1) New capacity or energy efficiency demand-

side management measures may be provided, in the interests of

security of supply, through a tendering procedure or any procedure

equivalent in terms of transparency and non-discrimination, on the

basis of published criteria. Those procedures may, however, be

launched only where, on the basis of the authorisation procedure,

the generating capacity to be built or the energy efficiency or

demand-side management measures to be taken are insufficient

to ensure security of supply. Such a tender may be launched

by a public body or a private body independent from electricity

generation, distribution and supply activities, appointed for the

purpose by the Minister by notice in the Gazette. This body shall

take all necessary steps to ensure confidentiality of the information

contained in the tenders and shall follow the rules in sub-regulation

(3)

Provided that the Minister may decide not to adopt such

a tendering procedure or any procedure equivalent in terms of

transparency and non-discrimination, on the basis of published

criteria insofar as its adoption would obstruct the performance, in

law or in fact, of the obligations imposed on electricity undertakings

in the general economic interest and insofar as the development of

trade would not be affected to such an extent as would be contrary

to the interests of the Community. The interests of the Community

include Article 86 of the Treaty.

(2) The Minister may ensure the possibility, in the

interests of environmental protection and the promotion of infant

new technologies, of tendering for new capacity on the basis of

published criteria. Such tendering may relate to new capacity or

to energy efficiency or demand-side management measures. A

tendering procedure may however, be launched only where, on

the basis of the authorisation procedure the generating capacity

to be built or the measures to be taken, are insufficient to achieve

those objectives.

(3) The details of the tendering procedure for means

of generating capacity and energy efficiency or demand-side

management measures shall be published in the Official Journal

of the European Union at least six months prior to the closing

date for tenders. The tender specifications shall be made available

to any interested undertaking established in the territory of a

Member State so that it has sufficient time in which to submit a

tender

Provided that with a view to ensuring transparency

and non-discrimination, the tender specifications shall contain

a detailed description of the contract specifications and of the

procedure to be followed by all tenderers and an exhaustive list

of criteria governing the selection of tenderers and the award of

the contract, including incentives, such as subsidies, which are

covered by the tender. Those specifications may also relate to the

fields referred to in sub-regulation (2) of this regulation.

(4) In invitations to tender for the requisite generating

capacity, consideration shall also be given to electricity supply

offers with long-term guarantees from existing generating units,

provided that additional requirements can be met in this way.

(1) Enemalta Corporation is designated the

distribution system operator in Malta. The Authority shall ensure

that the distribution system operator acts in accordance with this

regulation and regulation 14 of these regulations.

(2) The distribution system operator shall be

responsible for ensuring the long-term ability of the system to

meet reasonable demands for the distribution of electricity, for

operating, maintaining and developing under economic conditions

a secure, reliable and efficient electricity distribution system so as

to ensure continuity of electricity supplies in Malta with due regard

for the environment and energy efficiency. In any event, it must

not discriminate between system users or classes of system users,

particularly in favour of its related undertakings.

(3) The distribution system operator shall provide

system users with the information they need for efficient access to,

including use of, the system.

(4) The distribution system operator, when dispatching

generating installations, shall give priority to generating

installations using renewable energy sources or waste or producing

combined heat and power, subject that this is technically possible

and does not impact negatively on system stability or reliability.

(5) The distribution system operator shall procure the

energy it uses to cover energy losses and reserve capacity in its

system according to transparent, non-discriminatory and market

based procedures, whenever it has such a function.

(6) Where the distribution system operator is responsible

for balancing the distribution system, rules adopted by it for that

purpose shall be objective, transparent and non-discriminatory,

including rules for the charging of system users of their networks

for energy imbalance. Terms and conditions, including rules and

tariffs, for the provision of such services by distribution system

operators shall be established in accordance with sub-regulation (6)

of regulation 21 of these regulations in a non-discriminatory and

cost-reflective way and shall be published

(7) When planning the development of the distribution

network, energy efficiency or demand-side management measures

or distributed generation that might supplant the need to upgrade or

replace electricity capacity shall be considered by the distribution

system operator. Demand-side management may include real-time

management technologies such as advanced metering systems.

(8) When planning interconnections with other

systems the distribution system operator shall give special

consideration to the specific geographical situation of Malta,

the need to maintain a reasonable balance between the costs of

building new interconnectors and the benefit to final customers

of such interconnection, and if appropriate, ensuring that existing

interconnectors are used as efficiently as possible.

(9) The distribution system operator shall, set and meet

quality of supply and network security performance objectives. The

performance objectives shall be objective, transparent and non-

discriminatory and be published

Provided that such performance objectives shall be

subject to the approval and monitoring of the Authority.

(10) The distribution system operator shall, before the

adoption of any of the measures mentioned in this regulation, take

into account the impact of such measures on the cost of electricity

to final customers.

Without prejudice to regulation 16 of these regulations

or any other legal duty to disclose information, the distribution

system operator shall preserve the confidentiality of commercially

sensitive information obtained in the course of carrying out its

business, and shall prevent information about its own activities

which may be commercially advantageous being disclosed in a

discriminatory manner.

(1) The Authority may classify a system which

distributes electricity within a geographically confined industrial,

commercial, residentialor shared services site and does not, without

prejudice to sub-regulation (4) of this regulation, supply household

customers, as a closed distribution system if

(a) for specific technical or safety reasons, the

operations or the production process of the users of that

system are integrated; or

(b) that system distributes electricity primarily to the

owner or operator of the system or their related undertakings.

(2) The Authority may exempt the operator of a closed

distribution system from the requirement under sub-regulation (5)

of regulation 13 of these regulations to procure the energy it uses

to cover energy losses and reserve capacity in its system according

to transparent, non-discriminatory and market based procedures.

(3) Incidental use by a small number of households

with employment or other similar associations with the owner of

the distribution system and located within the area served by a

closed distribution system shall not preclude an exemption under

sub-regulation (2) of this regulation from being granted.

(1) The Authority shall, insofar as necessary to carry

out its functions, have right of access to the accounts of electricity

undertakings as set out in regulation 17 of these regulations.

(2) The Authority shall preserve the confidentiality of

commercially sensitive information. The Authority may disclose

such information where this is necessary in order for the Authority

to carry out its functions.

(1) The Authority shall take the necessary steps

to ensure that the accounts of electricity undertakings are kept in

accordance with sub-regulations (2) and (3) of this regulation.

(2) Electricity undertakings, whatever their system of

ownership or legal form, shall draw up, submit to audit and publish

their annual accounts in accordance with the rules of Companies

Act or other applicable legislation concerning the preparation of the

annual accounts of limited liability companies. Undertakings which

are not legally obliged to publish their annual accounts shall keep a

copy of these at the disposal of the public in their head office.

(3) Electricity undertakings shall, in their internal

accounting, keep separate accounts for each of their generation,

distribution and supply activities as they would be required to do if

the activities in question were carried out by separate undertakings,

with a view to avoiding discrimination, cross-subsidisation and

distortion of competition. They shall also keep accounts, which

may be consolidated, for other electricity activities not relating to

distribution. Revenue from ownership of the distribution system

shall be specified in the accounts. Where appropriate, they shall

keep consolidated accounts for other, non-electricity activities. The

internal accounts shall include a balance sheet and a profit and loss

account for each activity.

(4) The audit referred to in sub-regulation (2) shall, in

particular, verify that the obligation to avoid discrimination and

cross-subsidies referred to in sub-regulation (3) is respected.

(5) The annual accounts shall indicate in the notes any

transaction of a certain size conducted with related undertakings

(1) Where access to the network is refused by the

distribution system operator due to a lack of capacity, the Authority

may authorise the applicant to whom such refusal is made to

construct a direct line not connected to the distribution system for

the sole purpose of facilitating the supply of electricity for which

the application for use of the distribution system was made and

refused.

(2) The Authority shall lay down the criteria for the

grant of authorisations for the construction of direct lines. Those

criteria shall be objective and non-discriminatory.

(3) The Authority may refuse to authorise the

construction of a direct line if the granting of such an authorisation

would obstruct the application of the provisions of these

regulations, or any other law. Duly substantiated reasons must be

given for such refusal.

( 4) An authorisation to construct a direct line granted

by the Authority under this regulation shall require the person to

whom the authorisation is granted to comply with such technical

rules and other conditions, including those which may be necessary

to ensure that direct lines are compatible with the distribution

system, to such extent as the Authority may specify in the

authorisation.

The Authority when carrying out the regulatory

tasks conferred upon it by these regulations shall

(a) be functionally independent from any other public

or private entity;

(b) ensure that its staff and the persons responsible for

its management

(i)

act independently from any market interest;

and

(ii)

do not seek or take direct instructions from

any government or other public or private entity when

carrying out the regulatory tasks

Provided that this requirement is without prejudice

to close cooperation, as appropriate, with other relevant

national authorities or to general policy guidelines issued

by the Government not related to the regulatory powers

and duties under regulation 21 of these regulations.

In carrying out the regulatory tasks specified in these

regulations, the Authority shall take all reasonable measures in

pursuit of the following objectives within the framework of its duties

and powers as laid down in regulation 21 of these regulations, in

close consultation with other relevant national authorities including

competition authorities, as appropriate, and without prejudice to

their competencies

(a) promoting, in close cooperation with the Agency,

regulatory authorities of other Member States and the

Commission, a competitive, secure and environmentally

sustainable internal market in electricity within the

Community, and effective market opening for all customers

and suppliers in the Community and ensuring appropriate

conditions for the effective and reliable operation of electricity

networks, taking into account long-term objectives;

(b) developing competitive and properly functioning

regional markets within the Community in view of the

achievement of the objectives referred to in paragraph (a) of

this regulation;

(c) eliminating restrictions on trade in electricity

between Member States, including developing appropriate

cross-border transmission capacities to meet demand and

enhancing the integration of national markets which may

facilitate electricity flows across the Community;

(d) helping to achieve, in the most cost-effective

way, the development of secure, reliable and efficient non-

discriminatory systems that are consumer oriented, and

promoting system adequacy and, in line with general

energy policy objectives, energy efficiency as well as the

integration of large and small-scale production of electricity

from renewable energy sources and distributed generation in

distribution networks;

(e) facilitating access to the network for new

generation capacity, in particular removing barriers that could

prevent access for new market entrants and of electricity from

renewable energy sources;

(f) ensuring that system operators and system users are

granted appropriate incentives, in both the short and the long

term, to increase efficiencies in system performance

(g) ensuring that customers benefit through the

efficient functioning of the national market, promoting

effective competition and helping to ensure consumer

protection;

(h) helping to achieve high standards of universal

and public service in electricity supply, contributing to the

protection of vulnerable customers.

(1) The Authority shall have the following duties and

powers in terms of these regulations

(a) fixing or approving, in accordance with transparent

criteria, electricity generation, distribution and supply tariffs

or their methodologies;

(b) fixing or approving, in accordance with transparent

criteria, the tariffs for the purchase of electricity by Enemalta

where appropriate

(c) ensuring compliance of the distribution system

operator, as well as of any electricity undertakings, with their

obligations under these regulations, other relevant legislation

and Community legislation, including as regards cross-border

issues;

(d) cooperating in regard to cross-border issues with

the regulatory authority or authorities of the Member States

concerned and with the Agency;

(e) complying with, and implementing, any

relevant legally binding decisions of the Agency and of the

Commission;

(f)

reporting annually on its activity and the fulfilment

of its duties to the relevant authorities, the Agency and the

Commission. Such reports shall cover the steps taken and

the results obtained as regards each of the tasks listed in this

regulation;

(g) ensuring that there are no cross-subsidies between

generation, distribution, supply and other activities;

(h) monitoring investment plans of the distribution

system operator, and providing in its annual report an

assessment of the investment plans of the distribution system

operator as regards their consistency with the Community-

wide network development plan referred to in Article 8 (3)

(b) of Regulation (EC) No 714/2009; such assessment may

include recommendations to amend those investment plans;

(i) monitoring compliance with and reviewing the

past performance of network security and reliability rules and

setting or approving standards and requirements for quality of

service and supply or contributing thereto together with other

competent authorities;

(j) monitoring the level of transparency, including

of wholesale prices, and ensuring compliance of electricity

undertakings with transparency obligations;

(k) monitoring the time taken by the distribution

system operator to make connections and repairs;

(l) helping to ensure, together with other relevant

authorities, that the consumer protection measures, including

those set out in the Second Schedule to these regulations, are

effective and enforced;

(m) ensuring access to customer consumption data,

the provision, for optional use, of an easily understandable

harmonised format at national level for consumption data, and

prompt access for all customers to such data under paragraph

(g) of item 1 of the Second Schedule to these regulations;

(n) monitoring the implementation of rules relating

to the roles and responsibilities of the distribution system

operator, suppliers and customers and other market parties

pursuant to Regulation (EC) No 714/2009;

(o) monitoring investment in generation capacities in

relation to security of supply;

(p) monitoring technical cooperation between

Community and third-country transmission system operators;

(q) monitoring the implementation of safeguards

measures as referred to in regulation 26 of these regulations;

and

(r) contributing to the compatibility of data exchange

processes for the most important market processes at regional

level.

(2) While preserving its independence, without

prejudice to its own specific competencies and consistency with the

principles of better regulation, the Authority shall, as appropriate,

closely cooperate with other relevant national authorities when

carrying out the duties set out in sub-regulation (1) of this

regulation.

(3) Any approvals given by the Authority under these

regulations are without prejudice to any duly justified future use

of its powers under this regulation or to any penalties imposed by

other relevant authorities or the Commission.

(4) The Authority shall be responsible for fixing or

approving sufficiently in advance of their entry into force at least

the methodologies used to calculate or establish the terms and

conditions for

(a) connection and access to the distribution system,

including distribution tariffs or their methodologies. Those

tariffs or methodologies shall allow the necessary investments

in the networks to be carried out in a manner allowing those

investments to ensure the viability of the networks;

(b) the provision of balancing services which shall be

performed in the most economic manner possible and provide

appropriate incentives for network users to balance their input

and off-takes. The balancing services shall be provided in a

fair and non-discriminatory manner and be based on objective

criteria;

(c)

access to cross-border infrastructures, including

the procedures for the allocation of capacity and congestion

management;

(d) the supply of electricity to customers;

(e) the purchase of electricity by Enemalta Corporation

where appropriate.

(5) The methodologies or the terms and conditions

referred to in sub-regulation (4) shall be published.

(6) In fixing or approving the tariffs or methodologies

and the balancing services, the Authority shall ensure that the

distribution system operator is granted appropriate incentive, over

both the short and long term, to increase efficiencies, foster market

integration and security of supply and support the related research

activities.

(7) The Authority shall monitor congestion

management of national electricity systems including

interconnectors, and the implementation of congestion management

rules. To that end, the distribution system operator or market

operators shall submit its congestion management rules, including

capacity allocation, to the Authority. The Authority may request

amendments to those rules.

(8) The Authority may require the distribution

system operator, if necessary, to modify the terms and conditions,

including tariffs or methodologies referred to in this regulation,

to ensure that they are proportionate and applied in a non-

discriminatory manner. In the event of delay in the fixing of

distribution tariffs, the Authority shall have the power to fix

or approve provisional distribution tariffs or methodologies and

to decide on the appropriate compensatory measures if the final

distribution tariffs or methodologies deviate from those provisional

tariffs or methodologies.

(9) Any party having a complaint against the

distribution system operator in relation to that operator ’s

obligations under these regulations may refer the complaint to

the Authority which, acting as dispute settlement authority, shall

issue a decision within a period of two months after receipt of the

complaint. That period may be extended by two months where

additional information is sought by the Authority. That extended

period may be further extended with the agreement of the

complainant. The Authority’s decision shall have binding effect

unless and until overruled on appeal.

(10) Any party who is affected and who has a right to

complain concerning a decision on methodologies taken pursuant

to this regulation or, where the Authority has a duty to consult,

concerning the proposed tariffs or methodologies, may, at the

latest within two months, following publication of the decision

or proposal for a decision, submit a complaint for review. Such a

complaint shall not have suspensive effect.

(11) Complaints referred to in sub-regulations (9) and (10)

of this regulation shall be without prejudice to the exercise of rights

of appeal under Community or national law.

(12) Decisions taken by the Authority shall be fully

reasoned and justified to allow for judicial review. The decisions

shall be available to the public while preserving the confidentiality

of commercially sensitive information.

(1) The Authority shall closely consult and cooperate Regulatory regime for

with other regulatory authorities including with national regulatory cross-border issues.

authorities of other Member States, and shall provide them and the

Agency with any information necessary for the fulfilment of their

tasks under Directive 2009/72/EC. In respect of the information

exchanged, the Authority shall bind the receiving authority to

ensure the same level of confidentiality as that required of the

Authority.

(2)

The Authority shall cooperate at least at a regional

level to

(a) foster the creation of operational

arrangements in order to enable an optimal management

of the network, promote joint electricity exchanges and

the allocation of cross-border capacity, and to enable an

adequate level of interconnection capacity, including

through new interconnection, within the region and

between regions to allow for development of effective

competition and improvement of security of supply,

without discriminating between supply undertakings in

different Member States;

(b)

coordinate the development of all network

codes

(c) coordinate the development of the rules

governing the management of congestion.

(3) The Authority shall have the right to enter into

cooperative arrangements with other regulatory authorities to foster

regulatory cooperation.

(4) The actions referred to in sub-regulation (2) shall

be carried out, as appropriate, in close consultation with other

relevant national authorities and without prejudice to their specific

competencies.

(1) Supply undertakings shall keep at the disposal

of the Authority, national authorities, including the national

competition authority and the Commission, for the fulfilment

of their tasks, for at least five years, the relevant data relating to

all transactions in electricity supply contracts and electricity

derivatives with wholesale customers and the distribution system

operator.

(2) The data shall include details on the characteristics

of the relevant transactions such as duration, delivery and

settlement rules, the quantity, the dates and times of execution

and the transaction prices and means of identifying the wholesale

customer concerned, as well as specified details of all unsettled

electricity supply contracts and electricity derivatives.

(3) The Authority may decide to make available to

market participants elements of that information

Provided that commercially sensitive information on

individual market players or individual transactions shall not be

released

Provided further that, this regulation shall not apply to

information about financial instruments which fall within the scope

of Directive 2004/39/EC.

(4) With respect to transactions in electricity

derivatives of supply undertakings with wholesale customers and

transmission system operators, this regulation shall apply only

once the Commission has adopted the Guidelines which define the

methods and arrangements for record keeping as well as the form

and content of the data that shall be kept.

(5) The provisions of this regulation shall not create

additional obligations towards the authorities referred to in sub-

regulation (1) for entities falling within the scope of Directive

2004/39/EC.

(6) In the event that the authorities referred to in

sub-regulation (1) need require access to data kept by entities

falling within the scope of Directive 2004/39/EC, the authorities

responsible under that Directive shall provide them with the

required data.

In the event of a sudden crisis in the energy market Access to and

and where the physical safety or security of persons, apparatus or operation

installations or system integrity is threatened, the Authority may

temporarily take the necessary safeguard measures. Such measures

shall cause the least possible disturbance in the functioning of

the internal market and shall not be wider in scope than is strictly

necessary to remedy the sudden difficulties which have arisen. The

Minister shall, without delay, notify those measures to the other

Member States, and to the Commission

Provided that the Minister shall amend or abolish such

measures, upon a decision by the Commission to amend or abolish

such measures, insofar as they distort competition and adversely

affect trade in a manner which is at variance with the common

interest.

(1) Subject to requirements relating to the maintenance

of the reliability, safety and stability of the distribution system,

based on transparent and non-discriminatory criteria defined by the

Authority

(a) the distribution system operator shall

wherever technically feasible and with regard to system

stabilityguarantee the distribution of electricity produced from

renewable energy sources;

(b) the distribution system operator shall also

provide for priority access to the distribution system of

electricity produced from renewable energy sources;

(c) when dispatching electricity generating

installations, the distribution system operator shall give

priority to generating installations using renewable energy

sources in so far as the secure operation of the national

electricity system permits and based on transparent and non-

discriminatory criteria. The distribution system operator

shall ensure that appropriate distribution system and market-

related operational measures are taken in order to minimise

the curtailment of electricity produced from renewable

energy sources. If significant measures are taken to curtail

the renewable energy sources in order to guarantee the

security of the national electricity system and security of

energy supply, the distribution system operator shall report

to the Authority on those measures and indicate which

corrective measures they intend to take in order to prevent

inappropriate curtailments.

(2) The distribution system operator shall set up

and make public its standard rules relating to the bearing and

sharing of costs of technical adaptations, such as connection to

the distribution system and distribution system reinforcements,

and improved operation of the distribution system, which are

necessary in order to integrate new producers feeding electricity

produced from renewable energy sources into the distribution

system. Those rules shall be based on objective, transparent

and non-discriminatory criteria taking particular account of

all the costs and benefits associated with the connection of

those producers to the distribution system and of the particular

circumstances of producers located in peripheral regions and in

regions of low population density. Those rules may provide for

different types of connection.

(3) The distribution system operator shall provide to

any new producer of energy generating electricity from renewable

energy sources which needs to be connected to the system,

with the comprehensive and necessary information required,

including

(a) a comprehensive and detailed estimate of the

costs associated with the connection;

(b) a reasonable and precise timetable for receiving

and processing the request for grid connection;

(c) a reasonable indicative timetable for any proposed

grid connection

Provided that electricity producers generating

electricity from renewable energy sources which needs to

be connected to the grid, may issue a call for tender for

work connection, provided that they meet the standard

specifications and technical approval by the distribution

system operator

Provided further that electricity producers generating

electricity from renewable energy sources which needs to

be connected to the grid shall act in conformity with the

network code.

(5) The Authority shall ensure that tariffs charged

by the distribution system operator for distribution of electricity

from plants using renewable energy sources reflect reasonable

cost benefits resulting from the plant’s connection to the network.

Such cost benefits could arise from the direct use of the low-

voltage grid.

(1) Enemalta Corporation shall prepare procedures, Special clauses to

subject to the prior approval of the Authority, to ensure that monopoly position by

the purchasing of electricity is carried out with sufficient Enemalta Corporation.

independence from the rest of Enemalta business and that

Enemalta Corporation does not discriminate against any other

producer in favour of Enemalta. These procedures shall be

submitted to the Authority within two monthsone year of the

coming into force of these regulations. and may be modified by

the Authority at any time it so decides.

(2) Enemalta Corporation shall maintain or procure

an appropriate level of reserve generation capacity, including

availability of back-up capacity for electricity from renewable

energy sources and cogeneration, where technically necessary, in

order to achieve and maintain standards of reliability and maintain

a balance between demand and supply and stable operation, as

established by the Authority, for the supply of electricity to meet

demand, and shall be compensated for this service.

(1) The Authority may issue a compliance order

against any person who in its opinion has contravened any of

the provisions of these regulations or a condition of a licence or

authorisation issued thereunder.

(2) Any person who fails to abide by the provisions of

a compliance order issued by the Authority shall, without prejudice

to any other liability under these regulations, the Act or any other

law, be guilty of an offence. and be liable, on conviction, to a

fine (multa) of not less than one thousand euro (€1,000) and of

not more than sixty thousand euro (€60,000) for each day during

which the failure to comply subsists.

(1) Any person who contravenes any of the provisions

of these regulations or of a licence condition or of an authorisation or

approval issued thereunder, shall be guilty of an offence. and shall,

on conviction, be liable to a fine (multa)

of not more than sixty-

nine thousand euro (€69,000) or for one thousand and three hundred

euro(€1,300) for each day during which the offence persists.

(2) Any person who, when information with respect to these

regulations is requested or required by the Authority, knowingly or

recklessly -

(a) gives any false, inaccurate or misleading

information; or

(b) supplies incomplete information; or

(c) fails, without reasonable cause, to supply

information requested within the time given; or

(d) prevents or hinders any investigation; or

(e) produces or furnishes, or causes or knowingly allows

to be produced or furnished, any document or information

which he knows to be false in any material respect,

shall be guilty of an offence. and shall, on conviction,

be liable to a fine (multa) of not less than one thousand euro

(€1,000) and of not more than sixty thousand euro (€60,000)

for each day during which the failure to comply subsists.

(3) Notwithstanding any other provision of these

regulations, where any person fails to comply with the provisions

of these regulations or of a licence or authorisation condition for a

period not exceeding three months, the Authority may revoke such

licence or authorisation.

The Authority may impose an administrative fine upon

any person who infringes any provision of these regulations or

who fails to comply with any directive or decision given by the

Authority in ensuring compliance with these regulations.

The Electricity Regulations, 2004 are hereby being

2004. revoked.